The rebel chief arrived at Juba airport at 9:30am (0630 GMT) and was welcomed by President Salva Kiir.
It was not immediately clear if Machar would remain in Juba after the ceremony, as his aides have expressed concerns over his safety there.
Last month he and President Salva Kiir signed a new peace deal in the latest attempt to end the five-year war.
South Sudan rebel leader Riek Machar returned to the capital Juba for the first time in more than two years on Wednesday to take part in a peace ceremony.
Machar, who under the terms of a peace deal is to be reinstated as vice president, had not set foot in the city since he fled in July 2016 under a hail of gunfire when an earlier peace accord collapsed.
The rebel chief arrived at Juba airport at 9:30am (0630 GMT) and was welcomed by President Salva Kiir, Machar's former ally turned bitter enemy.
The two are to join regional leaders at the ceremony later Wednesday to publicly welcome the most recent peace agreement, signed in the Ethiopian capital Addis Ababa in September.
It was not immediately clear if Machar would remain in Juba after the ceremony, as his aides have expressed concerns over his safety in the city.
A previous planned homecoming for Machar was put off by wrangling over how many bodyguards he could bring with him and what weapons they would carry.
Lam Paul Gabriel, a spokesman for Machar's SPLM-IO rebel group, had said on Tuesday that he would be accompanied by around 30 political figures.
"We are worried for his security in Juba, but the truth is here: we are for peace, and what we are trying to do is build trust. So that is why he is able to leave his forces behind and just go with politicians," Gabriel said.
South Sudan's civil war erupted in December 2013 when Kiir accused Machar — then his deputy — of plotting a coup.
The conflict split the country along ethnic lines and seen mass rape, the forced recruitment of child soldiers and attacks on civilians.
It has caused one of the world's greatest humanitarian crises in the world's youngest country.
South Sudan gained independence from its northern neighbour Sudan in 2011 after a 22-year civil war pitting rebel groups against Khartoum.
Several ceasefires and peace agreements have so far failed to end the fighting that has killed an estimated 380,000 people, uprooted a third of the population, forced nearly two-and-a-half million into exile as refugees and triggered bouts of deadly famine.
Sudan earlier this month appointed a peace envoy to South Sudan following the signing of the September accord in Addis.
